Essay on Sustainable Businesses: Maximizing Value with Closed-Loop Supply Systems

Introduction

Sustainable initiatives have become a norm as companies and businesses aim to stop wasting resources, as earth resources become scarce by the day. Consumerism, especially for personal electronics and other consumable products such as plastic, has become a sustainability issue in the last couple of years as these dangerous waste flooding landfills (Szmelter, 2015). Businesses are now adopting closed-loop supply systems, which focus more on maximizing value on their resources by producing less waste compared to the old policy of concentrating on a product's life cycle until it reaches the consumer (Szmelter, 2015). This paper will seek to determine that closed-loop supply system (CLSCM), through reverse logistics, optimizes sustainability issues that minimize logistics and consumer costs through recycling materials and waste.

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The supply chain includes activities like manufacturing, marketing, purchasing, and distribution. The activities provide value to the consumer. There has been a growing demand for green economics and sustainable development in the last two decades in different fields (Szmelter, 2015). There has been the emergence of various studies in the areas related to logistics and supply chains.in comparison to traditional methods, the closed-loop supply system tries to modify different aspects, including the goals of a business. Traditional modes aim at lowering cost while improving the efficiency across the supply chain, thus maximizing the financial benefits (Govindan, 2015). CLSCM tries to maximize financial benefits and decrease wastage of valuable resources while attempting to reduce bad emissions. This is done to create balance economic, environmental, and social effects of manufacturing products (Govindan, 2015). CLSCM also tries to change the management structure in a supply chain. Environmental performance is considered in a company's external and internal management, which is still lacking traditional supply chains (Govindan, 2015).

Another aspect changed by CLSCM is the business model, as it represents an adequate business model. Elements such as environmental protection and low carbon emissions are included in every logistics and supply chain. These measures are aimed at realizing a supply chain system that is all green with minimal carbon emission in the entire lifecycle of a product (Kumar& Kumar, 2013). The business process is also altered by the CLSCM as traditional supply chains begin with suppliers ending with users, making the flow irreversible and one way (Kumar & Kumar, 2013). CLSCM, on the other hand, makes the flow reversible and circular as products are managed in the entire lifecycle so that wastes can have a second life or can be converted into raw products for other purposes (Autry et al., 2015). Lastly, another aspect altered is the patterns of consumption. The outdated supply chains are voluntary initiatives fueled by customer interests, while CLSCM can be encouraged via green government initiatives and corporate social responsibilities (Szmelter, 2015). CLSCM has four sections that include

Green Operations

It is also referred to as Reverse Logistics (RL), since it is opposite of traditional logistics (Szmelter, 2015). Reverse logistics is the process whereby a manufacturer accepts already shipped products from consumption to possible recycling for remanufacturing (Szmelter, 2015). Reverse logistics has been used widely in the motor vehicle industry. The first step in reverse logistics is the collection of products where items are collected and taken to different facilities for remanufacturing (Kumar & Kumar, 2013). The next step is sorting and recycling, where the sorting of reusable items is made. The product design is accomplished with minimal effect on the environment.

Green design

This is a crucial section in CLSCM since it is all about providing a service or product that encourages the masses on environmental awareness (Szmelter, 2015). Big industries with diverse supply chains should consider the benefits that lie with the adoption of reverse logistics. Companies are being pressured into "greening" their supply chains. There are different activities involved in this section, including designing products to reuse or regenerate the product (Kumar & Kumar, 2013). The product is also produced with minimal harm to the environment and provided with materials that can later be used in other products (Quariguasi et al., 2010).

Life Cycle Assessment of a Product

This is a crucial sub concept in Green design, and it was implemented to examine environmental related items to the process of production. These processes are in stages and range from the acquisition of raw materials, manufacture, distribution and recycling, remanufacturing, and the last disposal (Szmelter, 2015). According to Kumar 2013, lifecycle analysis quantifies and examines materials and energy used and makes an assessment on the product's impact on the environment.

Green Production

In CLSCM, Green production is a sustainable method in designing and engineering activities in product development (Szmelter, 2015). Manufacturing companies remain the most significant contributor to products that destroy the environment, and they are, therefore, more encouraged more to adopt these initiatives (Geyer & Jackson, 2004). Among the dangers that the environment faced was the slow destruction of the ozone layer, climatic change, and depletion of valuable natural resources. The green approach can trace its roots many years back since the Greeks were known to use solar power (Geyer & Jackson, 2004). Going green entails, there be a green economy, which also means that various social and environmental issues are addressed while also creating job opportunities (Geyer & Jackson, 2004). When a business decides to adopt green initiatives, its processes become more efficient, and there is the use of clean technology that does not harm the environment or create harmful wasteful materials. Adopting green operations also benefits supply chain partners as a company that embraces these initiatives can differentiate itself from other organizations, and customers may be willing to cash out extra money for premium rates for the sold products (Szmelter, 2015).

Waste Management

The recycle programs focus on managing wastes that have already been manufactured. In contrast, Source reduction concentrates on preventing and reducing wastes produced, rather than managing them after they have been created, with the goal of efficiently. Using resources by evaluating how business is done, how raw materials are utilized, and the extra materials bought (Savaskan et al., 2004). Source reduction is achievable with measures such as utilizing disposable materials, removing certain items, using durable products, and recycling (Savaskan et al., 2004). Recycle and reuse waste management programs, focus on the management of waste. Pretreatment is used when the trash has surpassed a three-point examination, and all three points have been passed. The three points include that the item has to be a thermal, physical, biological, or chemical. The second point is that it must change the characteristics of the waste. Lastly, it must decrease the volume of its harmful nature (Savaskan et al., 2004). According to Kumar 2013, there is an eight-point strategy that a manufacturer can do if they intend to protect the environment: 1. Decrease waste by enhancing efficiency.2. Selling produced waste to other businesses 3. Building a new plant to convert waste into useful products that can be valuable to another company or people,4. Working with local and state authorities to make agreements on the proper disposal of wastes,5. Negotiation with local authorities on emission standards,6. Building a treatment plant collaborating with other partners to dispose of residual waste,7. Making the treatment plant with its staff, 8. Pitching the successful implementation to other businesses with similar problems.

Reverse Logistics Processes

Research on reverse logistics has increased over the years, along with its definition. Reverse logistics has been referred to as the purpose of logistics in source reduction, recycling, waste disposal, and product returns (Savaskan et al., 2004). There are major differences between forwarding logistics and RL concerning purpose and processes. RL is associated with sustainability as products are taken back from the consumer either for recapturing the value of the item or by disposing of the item correctly or through repossessing (Kumar & Kumar, 2013). Forward logistics is only concerned with getting the product to the consumer. Most research has been conducted on forward logistics, ignoring RL. As mentioned previously, there are different processes in RL, including acquisition of the product, collection, sorting, and proper disposition.

Product Acquisition

This is the process of taking back products from consumers for more processing. This is an essential aspect of the success of RL since there is uncertainty on time and the quality and quantity of the recycled product. Gatekeeping refers to a set-off decision made on whether a product should be resent for reprocessing or whether the consumer should be given back the product (Govindan & Kannan, 2015).

Collection

This is the process following acquisition where collected items are sent to new facilities for disposition, sorting, and inspection. These methods have been categorized into three groups. Businesses collecting products from consumers directly, manufacturers taking back returned products through retailers and finally manufactures taking their products through third-party logistics (Govindan & Kannan, 2015)

Sorting and Inspection

Collected items are sorted and inspected. Product returns can either be customer-related, manufacturing, or distribution. Sorting is crucial since products are categorized in terms of their condition or their quality (Govindan & Kannan, 2015).

Disposition

Once the items are sorted and inspected, the next step is making decisions about the disposition of the item, which is a crucial process in the RL. There different available disposition options that include repair, reuse, recycling, and disposal (Govindan & Kannan, 2015).

Sustainability Performance

Sustainability has become a recurring strategic theme for businesses. It is considered as the combination of social, economic, and environmental objectives while providing a balance between these three aspects (Quariguasi et al., 2010). Businesses understand nowadays that they have a responsibility to society and the environment (Quariguasi et al., 2010). Large international corporations are under increased pressure to consider issues related to sustainability and to create nonfinancial measures of measuring their performance besides the traditional ones. Organizations view sustainable development as crucial goals because it helps companies achieve competitiveness in the long-term.

Reverse Logistics and sustainable development

RL has the potential to make a significant impact on improving programs aimed at achieving sustainability performance in organizations (Govindan & Kannan, 2015). There is an impact in different aspects, including cost-saving, increase in revenue from products recycled and remanufactured, there is better customer satisfaction, and there is a positive effect on global warming and climate change since the carbon footprint is reduced when products are taken back. Sustainable and efficient RL has the potential of creating a competitive advantage because there is saving in different aspects such as transportation and distribution. At the same time, the organization improves its corporate image to the public (Govindan & Kannan, 2015). To ensure sustainable RL...